FXstreet.com (Barcelona) - The sterling is trading sensibly lower against the buck on Friday, as sentiment surrounding the pound worsened in the wake of softer-than-expected UK retail sales during December.

Jane Foley, Senior Currency Strategist at Rabobank, argues that GBP is the worst G10 performer in 2013 so far, leaving it exposed to further pressure following the recent better prospects for the euro area for 2013 and a deterioration of the domestic fundamentals. The expert adds that this year the UK could lose its AAA status, formerly a major support for the currency.

“Even though open ended QE for the Federal Reserve is likely to keep the USD on the back foot, in view of the UK’s worsened fundamental backdrop we now expect cable to trade down towards the GBP/USD1.5600 area on a 3 mth view”, Foley concludes.